SBA publishes details and rules for the PPP relaunch
Community financial institutions will be able to submit loan applications for the Small Business Administration’s Paycheck Protection Program at least two days before other lenders, the SBA said last night as it released tentative final rules for the upcoming PPP restart. However, the SBA did not announce the date that it will reopen its portal to applications for the $ 284 billion round.
The special window for Community Financial Institutions is part of the SBA’s efforts to ensure that companies in need of PPP funding most can get it. The PPP Re-Approval Act to provide special pools of funds for first-time PPP borrowers, very small businesses and small businesses in LMI neighborhoods, and for loans from municipal financial institutions.
The first tentative final rule amends the existing PPP rules to reflect changes made by Congress, including fees, borrower eligibility, loan amounts, eligible expenses, dependency on borrower attestations and loan increases, and a new registration requirement for all lenders. “Most of this document, however, restores existing regulatory requirements to provide lenders and new PPP borrowers with a single regime to learn about borrower eligibility, lender eligibility, and loan application and grant requirements, as well as general rules for top-ups and loan waivers for Advise PPP Loans. “Said SBA.
Meanwhile, the second rule governs the second drawing loans that are now available to borrowers with 300 or fewer employees who saw a 25% or more decrease in sales in 2020 compared to 2019 and the full amount of their first drawing PPP loan have used. “Second-drawing PPP loans are generally subject to the same terms and requirements as first-drawing PPP loans,” said SBA. The maximum loan amount is $ 2 million, or two and a half months of average labor costs, whichever is lower. The rule includes several calculations to determine eligibility and loan amounts.